A new Alabama law increases the minimum automobile liability insurance coverage to equal what has long been required in Georgia — to $25,000 in coverage for a single injury or death, $50,000 for multiple injuries or deaths, and $25,000 for property damage.  Alabama motorists will be required to comply with the new limits when they renew their current policies.

I just got word of a new example of deceptive claims practices in the insurance industry. A major insurance company is now  referring to its claims adjusters as "counselors."  When one calls the claims department, the recording says,  "All of our COUNSELORS are busy but someone will be with you shortly."  It appears the company is changing its nomenclature from "claim rep" (someone who will take advantage of the unrepresented) to "counselor."

A dictionary definition of "counselor" is:

coun·se·lor

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One bill combines stacking of uninsured motorist coverages and elimination of preapproval of auto insurance rates, in an interesting illustration of legislative sausage making.
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As an attorney in Atlanta handling catastrophic injury cases, I often see problems with the "sticker price" on medical and hospital bills significantly exceeding the "reasonable and customary" amounts paid by medical insurers, and occasionally huge gaps between the bills and the available coverage. There are no easy solutions, so we just work it out on a case by case basis for our clients. The following video report from the Wall Street Journal is enlightening.

Several weeks ago, the story broke that Progressive Insurance sent private investigators to join its own policyholders’ church and joined their home Bible study group under false presenses, hoping to uncover evidence inconsistent with the insureds’ injury claim. When the company was caught in that ruse, the CEO said what they had done "appalling."  Now in responding to a lawsuit, Progressive says this conduct was "reasonable."   How does "appalling" so quickly become "reasonable." Could it be that is was "appalling" only that they got caught?

It takes a lot for Georgia Insurance Commissioner John Oxendine — who is normally considered to be in the pocket of the insurance industry — to launch an apparently aggressive investigation of a major insurance company.  Now, however, even Oxendine has ordered a market conduct examination into recent allegations of invasion of privacy, fraud and other misdeeds by Progressive Insurance Co. for allegedly sending private investigators into a church confessional to spy on a couple who had filed suit against the company. Two private detectives for Progressive allegedly posed as a married couple wanting to join the church. They talked their way into a private confessional at a member’s home and recorded potentially embarrassing details from several people there. Progressive says it’s sorry.  More likely the company is sorry it got caught.

Thanks to alert reader Shannon Duffy at American Lawyer Media for calling to my attention a recent federal district court ruling in Philadelphia.

In Mills v. London Grove Township, a toddler had a serious serious head injury resulting in cerebral palsy.  Liability carriers agreed to pay their grossly inadequate policy limits. After fees and expenses a total of $357,170.21 was available for a special needs trust for the child. However, the insurance company that paid medical benefits under the father’s employer’s ERISA plan demanded that it be reimbursed $123,690.12 from the child’s recovery.  The court analyzed the ERISA claim under Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) and Sereboff v. Mid Atlantic Medical Serv., Inc., 547 U.S. (2006). The court concluded, in part, as follows:

The net effect of the two cited Supreme Court opinions,as applied to the present case, is, in my view, as follows: the parties to this litigation have a right to settle their differences, and have done so. The only question before this court is whether the proposed settlement is fair to the minor. I conclude that it is. Nothing in the ERISA plan confers upon ACS Recovery Services a right to control the conduct of this litigation; it has no right to object to the proposed settlement.

. . .

In the unusual circumstances of this case, I conclude that it is appropriate to require the dotting of all i’s and the crossing of all t’s. ACS Recovery Services paid the medical benefits without first obtaining a written reimbursement agreement, as contemplated by the Plan. Assuming that its right to assert a lien was not fatally impaired by that omission, its lien would not come into existence until the Plan beneficiary (the plaintiff-husband-employee) received funds reimbursing the medical expenses in question. That has not yet occurred, and, if the proposed compromise settlement is effectuated in all its
terms, will not occur.

ACS Recovery Services’ belated request for injunctive relief seeks to enjoin the transfer of funds to the “special needs trust.” Since the adult plaintiffs will not receive any of the funds in question, they are not proposing to transfer any
funds to the special needs trust. ACS Recovery Services has not sought injunctive relief from anyone else.

Ordinarily, a court would be reluctant to rely upon the technicalities discussed above. In this case, however, the equities seem to favor such an approach. The damages suffered by the minor-plaintiff are astronomical, and life-long. In the final analysis, the real dispute generated by ACS’s opposition is between ACS and the taxpayers who, in the future, will be called upon to bear the minor’s medical expenses. ACS was paid premiums for its coverage; the taxpayers have not been.

This opinion was written by Senior Judge John Fullam, age 85, who was appointed by President Johnson in 1966.  It is good to have some wise older judges who remain productive and are able to see past the corporate heartlessness that seems to predominate in some quarters these days.